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German Parliament Provides Legal Certainty for the Operation of Unencrypted Wireless Networks

On June 30, the German Bundestag passed an amendment to the Telemedia Act to strengthen the position of operators of unencrypted local wireless networks. The key issue of the amendment is the limitation of "liability for interference" (Störerhaftung). The so called "WLAN-Gesetz" (in German only) is expected to take effect by the end of 2017 at the latest and aims to expand public and unencrypted wireless networks in Germany.

After the amendments become effective, the operators of unencrypted wireless networks are put on the same level as service providers under the Telemedia Act. As a result, they will no longer be liable for claims for damages, injunction and abatement, and judicial and extra-judicial costs resulting from infringements of third-party rights by their network-users. Exceptions shall only apply if and insofar as the operator himself is involved in the infringement of third-party rights. Password protection and user registrations may be provided by the operator on a voluntary basis, but are no longer required to be discharged from liability.

With the exclusion of liability for injunctive relief, the legislature removed the basis for "liability of interference" from the Telemedia Act. Nevertheless, operators of unencrypted wireless local networks should continue to monitor and limit the use of their networks, as the new change allows and promotes the imposition of network-barring (Netzsperren) by the courts. Operators will be obligated by law to block the use of illegal information, if there is no other way to prevent current and future violations of third-party rights by network-users. Operators must now consider implementing technical data protection measures such as DNS-, IP-, and URL-blocking, or data limitation, which can help prevent the information from being retrieved by network-users.

It remains to be seen how the German courts will put network-barring into practice. Critics already raise concerns that the obligation to block specific web content may entail the risk of so-called "overblocking," meaning that the legal use of content maybe affected by the technical limitations as well. On the European level, the legislature’s decision to incorporate a broad release from liability coupled with the exclusion of a reimbursement for judicial and extra-judicial costs could result in a conflict between the national laws and the principle of effective enforcement for the rights-holders, as laid down in the Enforcement Directive.